Service Quality And Its Impact On Customer Satisfaction

Abstract

Service quality and customer satisfaction have been widely recognized as fundamental drivers in the formation of purchase intentions. The concepts are important for companies to gain long-term competitive advantage and retain customers. Several scholar articles suggests there is a critical relationship between these two variables, which is also a critical determination of brand equity and customer loyalty. This study will clarify its nature by empirically assessing on the effects of service quality on customer's perceptions and satisfaction. This study will use the SERVQUAL model and other measurement methods to examine and analyze the case. Divergent methodologies are conducted to examine the distinct antecedent causes and consequential effects. Key findings will be based on the conceptual framework and five dimensions: assurance, tangibles, responsiveness, reliability, and empathy. According to research, customers are not satisfied with unprofessional service providers, unorganized schedule, and pricing that do not meet expectations. Results of the research will be backed up with statistical evidence and discussed comprehensively. Moreover, further research should be considered to gather more information that were not accessible due to the limitations of this study.

Full text

ASSIGNMENT 2
Name: VU NGUYEN KHANH DUY
Student ID: 19406544
Module: Business Dissertation
Lecturer: Ms. Marta
Submission Date: 19th April 2021

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Service Quality And Its Impact On
Customer Satisfaction
Word count: 10114 words
23rd March 2021

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ABSTRACT
Service quality and customer satisfaction have been widely recognized as fundamental drivers in
the formation of purchase intentions. The concepts are important for companies to gain long-term
competitive advantage and retain customers. Several scholar articles suggests there is a critical
relationship between these two variables, which is also a critical determination of brand equity
and customer loyalty. This study will clarify its nature by empirically assessing on the effects of
service quality on customer's perceptions and satisfaction. This study will use the SERVQUAL
model and other measurement methods to examine and analyze the case. Divergent
methodologies are conducted to examine the distinct antecedent causes and consequential effects.
Key findings will be based on the conceptual framework and five dimensions: assurance,
tangibles, responsiveness, reliability, and empathy. According to research, customers are not
satisfied with unprofessional service providers, unorganized schedule, and pricing that do not
meet expectations. Results of the research will be backed up with statistical evidence and
discussed comprehensively. Moreover, further research should be considered to gather more
information that were not accessible due to the limitations of this study.

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TABLE OF CONTENTS
CHAPTER 1: INTRODUCTION
1.1. Research Background
1.2. Significance and Purpose of Study
1.3. Research Aims and Objectives
1.4. Research Questions
1.5. Hypothesis
1.6. Study Limitations
1.7. Structure of the Thesis
CHAPTER 2: LITERATURE REVIEW
2.1. Service Quality
2.1.1. Service Quality Standards
2.1.2. Service Quality Measurement
2.1.3. Service Quality Management
2.1.4. Service Quality Dimensions
2.1.5. Characteristics of Service
2.1.6. SERVQUAL
2.1.7. Service Quality Gap
2.2. Customer Satisfaction
2.3. Customer Perception
2.4. Customer Loyalty
2.5. Improving Customer Service
2.6. Brand Equity
2.7. Brand Equity Pyramid
2.8. Brand Equity Measurement
2.9. Conceptual Framework
CHAPTER 3: RESEARCH METHODOLOGY
3.1. Research Introduction
3.1.1. Research Onion
3.2. Research Philosophy
3.2.1. Positivism and Interpretivism
3.2.2. Inductive and Deductive Research Approach
3.2.3. Quantitative and Qualitative Research Methods
3.3. Research Paradigm
3.3.1. Research Strategy
3.3.2. Research Choices
3.3.3. Time Horizon
3.3.4. Data Collection
3.3.5. Research Instrument

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3.4. Research Design
3.5. Validity and Reliability Analysis
3.6. Research Ethics
3.7. Data Analysis Procedure
CHAPTER 4: ANALYSIS AND RESULTS
4.1. Demographics and Cross Tabulations
4.2. Hypothesis Testing
4.3. Findings and Discussions
CHAPTER 5: CONCLUSION
5.1. Recommendations, Implications, and Future Research
5.2. Conclusion
REFERENCES
APPENDIXES
APPENDIX 1. DECLARATION FORM
APPENDIX 2. ETHICAL FORM

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Chapter 1
INTRODUCTION

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1.1. Research Background
In today's modern, competitive, and globalized business world, the key point to sustain a
competitive advantage lies in the quality of service that companies could provide, which in turn
will result in effective customer retention (Shemwell et al., 1998). What is more, a winning
strategy entails the necessity to build positive relationship with target customers and delivering
superior value over competitors (Kotler, 2009). An organization with high levels of service
quality will exceed customer expectations, yet remain to increase long term economic
competitiveness and profitability. Service quality's contemporary conceptualization has its
origins in the perceived expectancy-disconfirmation paradigm. The definition is a
multidimensional concept, different scholars interpret and evaluate the term differently (Ismail,
2009). Notable scholars such as Juwaheer and Parasuraman highlight that assurance, tangibility,
empathy, reliability, and responsiveness were among the paramount features (Johnson, 2006).
First, assurance tends to be referred to competence, credibility, and security of service (Ross,
2003). Second, tangibility is usually viewed as the appearance in terms of good equipment,
personnel, facilities, and communication materials (Sentosa, 2013). Third, empathy is the care,
understanding, and attention towards the customer (Raza, 2012). Fourth, reliability means the
ability and implemented promise from the service providers to deliver dependably and accurately
(Osman, 2013). Lastly, responsiveness is frequently seen as the willingness to provide service in
various situations.
Certain improvements could be achieved through reshaping operational processes, identifying the
underlying issues systematically, thereby establishing reliable a valid measures of performance
outcomes. Subjective aspects of customer service are measured depending on the conformity of
expected results and included benefits. Several successful organizations not only offer services
to satisfy customers but also delight and surprise them, exceeding their expectations. Service
quality is directly related to three other elements, including service potential, service process, and
service result; for instance, worker's qualifications, delivery speed, and customer satisfaction
respectively. Service quality and customer satisfaction are undoubtedly correlated as two crucial
concepts in the marketing theory and practice (Mackoy, 1996). Fulfilling customers' expectation
is a challenging process, especially for organizations with a broad customer base. Of course it is
impossible to avoid the possible differences between perceptions and expectations (Wilson,
2008). In fact, to know what the customers truly need is a significant tool to maximize profit and
enhance reputation. The process is similar to a chain of activities, sequential and parallel, that
organizations take into careful consideration. Relying on this perspective, perceived service
quality represent a value judgement of the overall organization before and after, with the equation
SQ=P-E (P stands for perceived performance; E for perceived expectations). In other words,
service quality plays an intermediary role in determining previous and current perceptions.
1.2. Significance and Purpose of Study
Despite the nature of the relationship, not much was known about the role of service quality in
forecasting research literature and variables. Many argued that this is often neglected due to over-

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emphasizing on internal properties of the service quality system. Here they employed a basic
correlation method in order to examine respondent attitudes according to the features, but
ignoring to measure the size of the relationship and its effect between service quality dimensions
and the following outcomes (May, 2018). Subsequently, the studies shown did not illustrate
adequate findings in order to be used as guidelines for practitioners. The nature of the research
has to be thoroughly explored since the findings are not enough to formulate strategic action plans
and improve the implementation of service quality. Several management programs revealed that
if service providers are able to properly implement quality, there would be a positive impact on
individual behavior and attitude of employees and stakeholders as well (Ismail, 2009).
Today's free economy focus explicably on the satisfaction scale and loyalty rate of customers
(Magi, 1996). There is a need for ongoing customer research and engagement to evaluate
attitudes, purchasing decisions, consumption habits and trends because the business process is
dynamic and customer satisfaction varies (Agbor, 2011). The importance of service quality does
not merely demonstrate through customer loss but doing it correctly will bring substantial
benefits, such as reducing operating costs, narrowing buying barriers and boosting sales
(Sherman, 2019). It requires more time and money to attract new customers as opposed to
retaining established ones. According to Chidambaram and Ramachandvan, customer's aim to
buy is a considerable strategic factor for companies to assess their strengths and weaknesses in
delivering goods and services within the supply chain.
Through recent years, the matter of service quality has gained much concern among industries
like healthcare, finance, and retail. Companies are searching for ways to distinguish themselves
from rivals through the services they provide. However, threats and risks are involved as this
leads to more complex situations (Reichheld, 1990). The topic of this paper is vital to propose a
suitable methodology, tackle the shortcomings, and provide practical proof about the effects of
service quality on the overall organizational performance based on extensive articles. In addition,
during the research, the paper will identify any shortages there might be in attaining successful
service quality and give suggestions on how it can be improved.
1.3. Research Aims and Objectives
This dissertation paper was structured to elaborate relevant theoretical and empirical evidence to
support the research hypotheses and conceptual framework. Next, to show the research approach
and executive methods, describing the procedure for conducting the study. Finally, to discuss the
analysis, results, and summarize a conclusion.
Therefore, the business dissertation concentrates on the objectives listed below:
1. To investigate the various factors that affect customer loyalty and satisfaction
2. To investigate the various factors that affect service quality and brand equity
3. To identify issues within service quality and measure its impact
4. To give recommendations and strategies to improve service quality

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1.4. Research Questions
The dissertation topic states: "Service Quality and its Impact on Customer Satisfaction", with
the research questions as follow:
RQ1. Which aspects of the service provided affect customer loyalty?
RQ2. Which features of the service provided affect customer satisfaction?
RQ3. In what ways the service quality can be strengthen?
RQ4. In what ways can companies increase customer satisfaction, loyalty, and brand equity?
RQ5. How to measure the gap between customer's expectations and service delivery outcome?
1.5. Hypothesis
Null hypothesis and alternative hypothesis will be tested out to see whether there is a remarkable
relationship between the variables.
Null Hypothesis:
1. There is no significant relationship between service quality and customer satisfaction.
2. There is no significant relationship between service quality and customer loyalty.
3. There is no significant relationship between service quality and brand equity.
4. There is no significant relationship between perceived service quality and delivery outcome.
Alternative Hypothesis:
1. There is significant relationship between service quality and customer satisfaction.
2. There is significant relationship between service quality and customer loyalty.
3. There is significant relationship between service quality and brand equity.
4. There is significant relationship between perceived service quality and delivery outcome.
1.6. Study Limitations
This dissertation paper is limited due to certain factors. These flaws could be the result of time
constraints, unavailability of resources, and lack of material utilization. Plus, another limitation
is the small sample size, making it difficult to maximize reliability in information gathering. The
research would be more accurate if there is a larger population for survey and data collection,
expanding the scope. In addition, this paper generally focusses on the broader picture of the
economy rather than precisely tap into a niche market. Nevertheless, these limitations are not seen
as critical but recommended for future studies.
1.7. Structure of the Thesis
The disposition of this dissertation consists of five parts, and is organized as follow: Chapter 1 is
the brief introduction and overview about the study research. Chapter 2 is the main body covering
in-depth theoretical discussions about service quality and customer satisfaction; including a
conceptual framework and visual infographics. Chapter 3 examines on research methodologies

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and the process plan. Chapter 4 analyzes different aspects of the findings, including SERVPERF
and SERVQUAL. Last but not least, chapter 5 shows conclusion, following by references and
appendixes respectively.

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Chapter 2
LITERATURE REVIEW

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2.1. Service Quality
Service quality is generally referred to the output of service delivery system, which is linked to
consumer satisfaction, perception, and opinions that are formed based on various contributing
factors and references. The interest on this issue has grown extensively over the last decade. It
has become a very popular field for academic and scholarly research (Zeithmal, 2000). A great
amount of models and theories have been developed to address and highlight this matter.
Scientific and technological innovations made way for the generation of quality, the more
frequency the less gap. These quality gaps will be further discussed later in the paper (Bhargava,
N.D.). In some cases, the best service efforts can be criticized because of the customer's bad
mood, according to direct service providers such as waitresses. It is recognized that the practice
in influencing customer may be affected by their psychological and physical conditions.
Therefore, the degree of discrepancy between the normative expectations of customers and the
perceptions at the state of time may alter (Parasuraman etal., 1994).
There are numerous measures and definitions of service quality without a single consensus
(Eshghi et al., 2008). Service quality is a complex construct that incorporates multiple attributes
which may change rapidly and dramatically, which will then facilitate precise measurement
(Karatepe, 2013). Consumers experience and perceive quality during the process whilst providers
attain and define them. The total delivery process is then evaluated, especially with those that is
constantly repeated, and will gradually maintain long-term customer relations if performed
accurately. When designing the process, a key element which is quality will influence the volume
of demand for the specific product or customer profile. The impact of quality service on financial
indicators and profit should not be underestimate. Quality-based strategy is sustainable and
excellent; must be viewed as a strategic force as it can significantly increase market share, drive
growth, and pose a barrier to those that seek to replicate.
Studies have shown the quality of service is a critical success point for commercial and retail
banks to win over one another (Kheng et al., 2005). As they daily perform face-to-face interaction
with customers, banks must maintain a professional environment at all times. Bankers are trained
to acknowledge the relationship between the two variables of service quality and customer
satisfaction in order to develop a competitive edge by tackling both tangible and intangible
aspects. In turn, the banks' revenue will increase in the long run (Parasuraman et al., 1988). To
be more specific, in order to have an effective marketing strategy, these firms need to understand
the minds of their target customers when choosing a service provider. For instance, the name,
reliability, reputation, physical facilities and other criteria. If marketers can truly understand the
assessment attributes, the presentation process will be much more efficient and simpler to manage
(Toelle, 2006). In today's world, one viral video clip of poor service quality can absolutely destroy
the business reputation. Word of mouth can spread at an extremely fast pace and the amount of
customer loss would be overwhelming (Ananth et al., 2011). There are businesses who
accidentally made a slight mistake in their front-line service delivery, leading to the public's
boycott and bankruptcy. Hence, service quality is considered an important concept not only for

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brokerage and insurance firms within the financial sector, but also in education, tourism,
hospitality, and any other high involvement industries (Saghier, 2013).
2.1.1. Service Quality Standards
Service quality is a structure of corporate culture which should set and manifest the values,
regulations, and standards. Concretizing in this direction will define the specific parameters of
customer's attitude (Ronzina, 2010). These may include the usage of speech formulas and
vocabulary, gestures and facial expressions, proxemics, appearance, environment, speed of
response and security. Moreover, if external and internal factors are consciously specific
regarding content, they become subtler when developing service quality. These factors are
characteristics of target client groups, features of the premises, and norms of human rights such
as the law of consumer protection. Furthermore, it also comprises of the core mission, vision, and
values along with characteristics of goods and services offered by the organization. Service
quality depend greatly on what is called Organization Standards, or OS. The table below
illustrates the functions of organization standards between three major community groups:
employers, employees, and customers.
Employers
Employees
Customers
Organization standards help
to attract clients through
competitive services and
enhance customer loyalty.
Organization standards help
to position the company in
the market, ensure credibility,
and manage staff more
efficiently.
Organization standards
contribute to the efficiency
and effectiveness of working
process.
Organization standards
contribute to self-
development and mainly
work for the cohesion of the
team.
The presence of organization
standards is a guarantee of
quality.
The presence of organization
standards add joy and
eagerness to the buying
process.
Figure 1 - Organization Standards Table (Archakova, 2013)
Quality standards were developed to improve product conformance initially in manufacturing and
supply chain but now imply to all areas of the business because all functional procedures are
interdependent. Subsequently, quantifiable standards are created to maintain these sets called
benchmarks which can be measured, monitored and regulated to meet requirements. International
corporations' quality systems are likely to match the British Standards Institutes (BSI) guidelines.
Quality should not be restrictive but adds value to customer service, leading to better corporate
performance. There are two types of customer-defined standards: hard and soft. Hard standards
judge on observable and countable things through auditing while soft standards deals with opinion
and belief based that require to be documented using perceptual measures (Bhargava, N.D.). The
service provider should form a clear description of objectives and circulate them to relevant
people. They should constantly update mechanism to review the documented policies regarding

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how the service will be approached. The fundamental quality process needs to cover procedures,
frameworks, communication, and training within the workplace. It can be summarized into eight
steps. First, define quality in the organization, do market research both internally and externally.
Then, develop a precise competitive analysis, judging actual performance in relation to
benchmark standards. Next, propose a strategy to eliminate quality gaps through the
implementation of proper programs. The final step is to monitor and control the performance
regularly.
Figure 2 (Stejerean, 2016)
2.1.2. Service Quality Measurement
Tangible products tend to possess objectivity in ways measurement adherence to concrete
specifications, which is typically performed by quality control function and assurance. However,
services are intangible and thus the quality is based on subjective evaluation on personal
viewpoints, making the measurement process challenging (Stejerean, 2016). To overcome this
problem, a structured approach is essential; and the most widely-used metric is SERVQUAL
(Pascal, 2016). Organizations can use several methods to monitor their quality of service
including conducting customer surveys to know whether the customers might have any
dissatisfaction about the process. These questionnaires will allow customers to elicit their
opinions and rate honestly about the personnel. Henceforth, the management team can take action

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to eradicate the deficiencies. Similarly, companies should also pay close attention to customer
feedback in forms of compliments, complaints or suggestions. This method will eventually reveal
the root causes and can prevent them from recurring. The service unit should have a solid plan
for staff training operations and use available resources effectively to become more flexible and
innovative over time.
2.1.3. Service Quality Management
Service quality management encompasses several different procedures, consisting of
maintenance and monitoring system for the long-term goals in regards to services offered to
customers to track developments and measure its efficiency (Veyrat, 2016). Differentiation may
be based on factors like the urgency of the task, duration of service transaction, or payment of
premium pricing. It is said that unoccupied time feels longer than occupied time. In other words,
customers should have something to do at least while waiting for the services, or it can cause a
detrimental experience, leading to anger and irritation. Besides, research had shown that
customers that are provided in advanced the estimated length of anticipated wait or their relative
position in the waiting queue will result in more positive outcomes as they have accepted to do
so. When having a clear understanding of the rules and priorities in the service delivery process
beforehand, the customers are more enforced and easygoing. In spite of that, the waiting queue
must be equitable on a first come first served basis, unless there is a separate section for prioritized
clients. Similarly, customers will always expect a reasonable explanation when the service is
taking too long to operate. Customer service department should be justifiable in communicating
cases of unexpected delays (Bhargava, N.D.).
2.1.4. Service Quality Dimensions
Figure 3 - Five Service Dimensions Customers care about (Alan, N.D.)

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Customer perception does not come from a single factor but from a host of contributing factors
that service marketers should evaluate accordingly. In the literature article 'Competing on Eight
Dimensions of Quality', author David Garvin identified eight dimensions applicable to quality of
service, which are aesthetics, durability, conformance, features, reliability, serviceability,
performance, and perceived prestige. Later on, in a refinement, Parasuram and two others
declared that there are only five dimensions to be superior, namely: assurance, empathy,
tangibles, reliability, and responsiveness.
Assurance is how companies build confidence and inspire trust, referring to knowledge and
courtesy of personnel and their ability to adapt these methods. This dimension is especially crucial
for high risk services due to the uncertainties involved. For example, investment companies
dealing with securities and funds, property and construction companies, legal affairs, or surgical
clinics demand high assurance as buyers lend their faith in the service. As prior evaluation may
be beyond customer's capabilities, many will opt to search for reviews from previous customers.
Satisfaction of one customer will affect the latter and therefore it is crucial to maintain high
quality service at all times. According to Osman and Ramayah, assurance and empathy had the
highest influence upon customer satisfaction in the banking industry of Malaysia (Lau, 2013).
Empathy relates to individualized attention and care to each customer, making the best effort to
see and acknowledge their viewpoint. Reliability is the dimension with the highest influence on
customer's perception of quality. It is increasingly important in sectors like airlines, to fulfill
promises about service provision, pricing and problem resolution (Wilson et al., 2008). If the first
delivery is unsuccessful, the provider enter the phase called 'Recovery' with higher expectations
due to the initial failure, yet more likely to come under scrutiny. It should maintain a record of
error-free as it is one of the most significant role in conventional service (Yang et al., 2004). Time
after time, delivery will become more reliable, helping the service provider to fully meet customer
expectations even at the lowest level.
Responsiveness is simply the willingness to provide prompt service in different scenarios, just
like a hotel's customer service system. As customers often have special requests, queries, or
complaints; the service provider, especially front-line employees, should be aware and equipped
to respond smartly. This dimension requires the ability to customize, communicate, innovate, and
focus on the notion of flexibility through training (Johnston, 1997). Tangibles are basically
physical facilities, materials, and equipment that are multifunctional and represents the
organization's appearance (Fitzsimmons, 2001). This dimension serves as the 'face' of the
organization and its workforce, particularly to new customers (Davis et al., 2003). Companies
should use this dimension to signal quality within the first thirty seconds and enhance their image
(Wilson et al., 2008).

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2.1.5. Characteristics of Service
Search qualities are attributes that exist before the service or product is purchased by consumers;
elements such as price, color, or style. Experience qualities are attributes that only takes place
after or during the delivery process. Credence qualities are attributes found in education,
advertising, accounting, or even funeral services as these are difficult to evaluate. Take a
consulting agency as an example, few customers have the knowledge to judge whether the service
provider actually did a good job. There are four main characteristics to distinguish services from
products. There has been debates surrounding the acceptance of scholars on using these as a basis
to examine customers' behavior and develop marketing strategies. It is important to establish these
characteristics to the extent which reflect consumers' perspective. One, intangibility introduces
the idea of selling and promoting services which cannot be seen, smelt, touched, tasted, or heard
before the purchase to appeal the senses (Regan, 1963). Subsequently, service providers cannot
rely on product-based strategy where the buyer alternatively evaluate prior to the purchase. Two,
inseparability enables consumers to shape performance and service quality, reflecting
simultaneous delivery and consumption stages (Gronroos, 1978). In other words, physical goods
are manufactured and distributed through multiple resellers whilst services are inseparable from
its provider. The provider's presence would become an indispensable part of the service just like
a cab driver and taxi service. As a result, organizations need to develop technical competence and
task-related interpersonal skills to input in human resources. Three, heterogeneity highlights the
potential for high variability and is sometimes a problematic criterion for high labor content
(Zeithmal et al., 1985). Throughout the day, performance may become less efficient, and services
offered vary depending on the providers' mental or physical conditions. A nail salon staff may be
working slower in the evening after a tiring long day, as opposed to morning hours. Similarly,
types of customers also differ among themselves and the idea of heterogeneity arises so that
companies should make an effort to please the most number of customers as possible with high
and consistent quality. Four, perishability means that services cannot be produced and stored for
later consumption or transferred to a future period (Rathmell, 1966). Services are acts that occurs
simultaneously thus tend to go waste and perish on the absence of consumption. In some cases,
management issues may be posed to organizations due to the inability to regulate sufficient supply
with demand during peak hours at banks, restaurants, or train stations. To solve this problem,
companies should try to utilize the capacity effectively without deteriorating the balance between
demand and supply.
2.1.6. SERVQUAL
SERVQUAL is a multidimensional instrument used for research purposes, designed to capture
the perceptions and expectations of customers. The diagnostic value of SERVQUAL is supported
by models which forms the conceptual framework for scale development. As mentioned earlier,
it is built based on the expectancy and disconfirmation paradigm. The instrument has become the

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dominant and most widely applied measurement scale in all areas of service quality and a variety
of contexts and robust cultural settings (Cook et al., 2002). Despite attracting some criticism from
researchers, its myriad of context-specific applications contribute an outstanding amount of long-
standing interests for organizations (Brady et al., 2001). The SERVQUAL model was first
developed in 1988 by A. Parasuraman, L. Berry, and V. Zeithaml and implemented into American
companies with the initial emphasis on quality systems development (Robinson, 1999). During
that phase, service measurement was not easily quantifiable and seemed abstract. However, the
importance of the model was noticed overtime to give a competitive edge and had serious impact
on the US market in the early 1990s. The SERVQUAL model has proved to be a consistent and
reliable qualitative analysis tool where observed quality is measured through environmental and
generic components (Gronroos, 2005). Thus perceived quality is different from objective quality
which involves objective assessment on the basis of measurable and verifiable predetermined
standards (Zeithaml, 1988). The SERVQUAL questionnaire, comprised of 22 questions, has been
described as the top standardized method to measure service quality. It is popular among today's
organizations as part of a broader conceptualization in analyzing customers.
Figure 4 - SERVQUAL-22 Questionnaires (Fripp, N.D.)

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Figure 5 - Simplified Model of Service Quality (Higgs, 2017)
The model of service quality, often known as the gaps model, is a framework that identifies the
core dimensions of service quality, expose shortcomings and propose a measurement scale for
SERVQUAL. In simple terms, it is an external analysis comparing and contrasting customers'
needs in relation to their actual experience. Because of that, instead of focusing on the measuring
system or business perceptions, it is vital to take into account customers' needs.
2.1.7. Service Quality Gap
In the center of the SERVQUAL model is the pattern of expectancy, showing the gaps as
difference between perceptions and outcomes. When expectations of received service delivery
exceeds perceptions, quality is deemed low and vice versa. The model set forth five gaps that
reflect a discrepancy between a variety of aspects. Only gap 1 is measurable while gaps 2 to 5
cannot be done so, but instead possess diagnostic value (Heerru, 2018).
The first gap is consumer expectation versus management perception. Companies may not always
understand what is necessary to achieve high level of satisfaction. This gap arises when the
service provider fails to deliver what the consumers had expected. It is also a result due to
insufficient communication between the two parties and a lack of understanding. For example,
hotel managers may focus too much on in-house facilities and services while guests are more
concerned about staff responsiveness and room services. This knowledge gap can be improved

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greatly through extensive market research with comprehensive studies, conducting surveys,
panels or even direct interviews in order to reduce the layers between customer and administrative
contact channels.
The second gap is management perception versus service quality specification. Sometimes
organizations may have identified what consumers want but still could not deliver the service
accordingly to a set standard due to market conditions, management indifference or resource
constraints (Lapaas, 2019). This gap arises when there is comprehension between service
providers and consumers but inadequately designed service, unsystematic process, or
inappropriate physical evidence led to poor quality service. In order to solve the policy-practice
gap, companies should be specific with their plans with clear standards, adjust performance to
meet objectives, update, monitor, and articulating service levels.
The third gap is service quality specifications versus service delivery. Although companies may
have guidelines in customer care, these do not assure quality performance. Employees play a
major role in affecting this gap as it is the consequence of ambiguity, role conflicts, lack of job
fit, poor supervision, and improper training. Technical breakdowns and malfunctions also
contribute to the cause. Recruiting the right employees is crucial, given that service is still largely
human-functioned rather than robotics in many cases. Companies should review operations and
HR departments to ensure specifications are achievable and develop a well-structured onboarding
program to cultivate a customer-centric environment, increasing productivity and retention.
The fourth gap is service delivery versus external communications. Customers and the public are
highly influenced by organizational statements through representatives and advertisements.
Organizations sometimes neglect to inform customers about the hidden efforts to influence their
perceptions. Companies should avoid the propensity to overpromise or exaggerations through
false marketing (Lapaas, 2019). In short, all communication methods including digital materials
should be honest, accurate, and realistic.
The fifth gap is expected service versus perceived service gap. The key to ensure service quality
is by exceeding or at least meeting the consumers' judgement through the context of service
delivery. This gap might be the result of underlying issues from other gaps, or a reflection of error
and misinterpretation; thus cannot be blocked directly without removing the previous ones.
In Grönroos' Perceived Service Quality model, expectations are images, communications, word
of mouth, and experience as functional and technical quality features. From the model, Grönroos
shows the means to narrow the gap although there are practical applications with factors
contributing to each side of the gap. By managing customers' expectations, service provider can
affect both sides of the gap, meaning that clear marketing strategies with effective process will
have a positive effect on the perception gap.

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Figure 6 - Grönroos Perceived Service Quality Model
2.2. Customer Satisfaction
Customer satisfaction is basically how happy the customers are with the services provided and
can be determined through surveys and ratings to understand their needs and make adjustments
where relevant (Machirori et al., 2011). Industrial firms, government bodies, service companies,
and nonprofit organizations all have one thing in common that is the main focus to satisfy the
customers (Broetzmann, 1995). Customer satisfaction is studied and debated regularly in
literature antecedents (Chidambaram, 2012). The considerations extend from physical to
psychological and normative aspects (Javadin et al., 2012). There is no doubt that customer
satisfaction and service quality are positively related constructs (Baker et al., 2000). Conversely,
several studies confirmed that service quality is a determinant of customer satisfaction regardless
whether they were cumulative or transaction oriented (Cronin et al., 1992). The two dispute
concepts are the ultimate goals of service providers (Awan et al., 2011). Nevertheless, it is
important to note that customer satisfaction is a much wider concept not just based on specific
dimensions (Wilson et al., 2008). Service quality is an evaluation over a long period hence is an
antecedent component of customer satisfaction (Ree, 2010). Both developing and developed
economies are affected by liberalization and globalization and the pressure of satisfaction are
forcing organizations to adapt rapidly to maintain competitive advantage (Forsythe, 2012). To
gain and protect market share in the long run, organizations must have strategies to ensure
customer satisfaction (Tsoukatos, 2006). Researches have shown that customer dissatisfaction
and negative judgements had led to several destructive effects on profit (Munusamy, 2006). Some
argued that satisfaction is the end product of perception (Karatepe et al., 2005).

22
Figure 7 - Customer Satisfaction Diagram (Wilson, 2008)
A review of Yi in 1991 states that customer satisfaction may be defined either as a process or an
outcome (Grigoroudis et al., 2010). The measurement of satisfaction has been explored by several
theorists through Total Quality Management (TQM). It shows that quality improvement could
not rely only on internal standards and metrics of the organizations but more on customer
feedback. What is more, quality should be manifested in ways to be perceptible to the total
number of customers (Siskos, 2010). Measuring satisfaction is beneficial because it improves
continuous and systematic efforts to communicate with the total clientele.
2.3. Customer Perception
Customer perception encompasses the way customers make decisions, interpret and select a
service provider. In turn, it reflects what they think and feel about the brand, and their advocacy
efforts, the extent to which they will make referrals. Their impressions and awareness is shaped
by different variables, including direct and indirect offering interactions. A report from Survey
Monkey shows that over 55% more consumers pay attention to the organizations' message after
they have been trusting it for some time. According to Forbes, fostering positive perceptions can
grow a loyal and sustainable customer base. Perception lies on personal internal factors like
moods, beliefs, and expectations (Keevy, 2011). Good customer perception attracts more
possibilities and opportunities as it enriches the value of the overall business. Moreover,
substitution costs are significantly reduced, which is a crucial plus point especially in this
technological era where anything can be easily replaced. Advancement in technology makes it
easy to switch between services when consumers feel unsatisfied with the current. In luxury retail,
high-end customers are committed to the brand itself not usability, price, or any other external
factors (Zach, 2019).

23
A study by Arokiasamy in 2012 assessed over 200 students in their level of satisfaction with the
university's service quality. The results showed similar results with strong correlation between
two variables, highlighting the importance of educational services in enhancing students'
attendance and eagerness to study. A pair of researchers conducted a random survey among 540
department store shoppers through the telephone to investigate their opinion about the
relationship with the store. Surprisingly, the empathy dimension was indicated the strongest
influential factor concerning satisfaction (Brady et al., 2001). In another study based in Taiwan,
passengers awaiting at the airport revealed that initial perceptions set the thresholds for services
to be encountered (Harvey, 1998). The study outcome was applied to diagnose strategies to
diminish the gaps. A study by Jang and Ho in 2012 showed that customers highly evaluate the
physical setting and surrounding environment, admitting them to influence behavioral intents
such as returning or word of mouth (Angelo, 2011). As the global economy is becoming more
severe, customers are starting to be aware of price. As a result, retail businesses are dynamic and
have to face volatile conditions (Devi et al., 2009).
2.4. Customer Loyalty
According to Rare Consulting, a whopping 85% of customers said their loyalty stemmed from
the happiness, likeability and trust for the company (Chambers, 2020). Focusing on improving
customer loyalty is one of the best investments as it substantially decreases operating costs,
reduce time and efforts to seek for new customers and of course, higher profits (Lister, 2019).
The average conversion rate is approximately 65% for existing customers while only 10% for
new ones (Ehrenberg, 2000). An investigation on internet banking and ecommerce clients
supported the view that higher levels of satisfaction equals higher loyalty rate (Chinomona et al.,
2014). However, satisfied customers do not mean they are loyal customers, unless they see long-
term values and rewards (Huff, 2007). Here, logical and cognitive reasons for recurring buyers
outnumbered the emotional and affective reasons. Apart from a firm knowledge base to classify
and observe data, it is important to track customer retention through a reliable a system of metrics
and make accurate calculations based on processed information (Oechsli, 2002).
2.5. Improving Customer Service
No matter how proactive the organization is, it is impossible to see all issues without honest
feedback. Whether through email, phone calls, website, or survey, it is important to collect as
much opinion as possible, preventing customers from voicing their displeasure on social medias
(Tim, 2018). Moreover, through offering a lenient and straightforward refund policy, huge
amount of trust will be earned, making the purchasing experience more risk-free as customers are
always looking for a guarantee. Another point is, many organizations struggle to establish
coordination effectively; hence implementing smart CRM platforms would streamline their
workforce processes. However, CRM software alone cannot compensate the shortcomings as
service providers must acquire adequate communication and problem solving skills (Sharma,
2018). IKEA is one of the best example for advanced customer service as they provide in-house
facilities for specific customers. Most recently, they've input augmented reality apps, allowing

24
customers to virtually design and arrange their furniture. Another example is Google, providing
top notch quality service to customers and immeasurable impact on employee experience. The
trend shows that the more satisfying the customers are, the more the employees are willing to
work for that company.
2.6. Brand Equity
Brand equity is one of the most important concepts in marketing and development, which can be
defined as the overall belief associated with the brand or its total value (Smith, et al., 2007). Brand
equity can also be assumed to be the customers' perspective attached to a brand (Wood, 2000).
Academic literatures have been studying on brand equity from the perspective of information
economics and cognitive psychology. The former states that a strong brand name is a credibility
while the latter states that other features drive attribute perceptions and consumer awareness
(Feldwick, 1996). Positive brand equity brings significant value to organizations as they can be
transferred among different product lines, increasing sales, revenue, and market share as they
become more widely recognized and preferred. Additionally, customers are willing to pay higher
price for products even when competitors sell for less, enabling more profit per sale. It has been
empirically demonstrated the importance of brand equity in price structure determination.
Businesses with positive brand equity can charge premium prices just like haute couture fashion
houses in the apparel industry. For instance, when Apple release a new model, customers around
the world line up several hours waiting for a product that could be found cheaper elsewhere. One
reason to their success is that Apple has amassed a staggering amount of positive brand equity,
translating to greater profit margins (Berry, 2000). In figure 8 below, David Aaker highlights ten
attributes that can be used to assess the brand's strengths and recommends to track each one
separately.
Figure 8 - Aaker's Brand Equity Model (Aaker, 1991)

25
2.7. Brand Equity Pyramid
The brand equity pyramid is original known as the Keller's Brand Equity model, developed by
Kevin Lane Keller. It is also known as the CBBE, Customer Based Brand Equity model. The idea
behind the concept is in order to build strong brand equity, organizations must first shape
consumers' perceptions, opinions, and feelings through six building blocks that are
subconsciously asked by customers. Step one is to make the brand identity stand out by aligning
perceived values for consumers to be aware of. The goal is to create brand salience, ensuring
perceptions are recognized. Step two involves building brand meaning through performance,
characteristics, and imagery, to meet customers' needs on a social and psychological level. The
goal is to identify and communicate what the brand stands for, its mission, vision, plus any future
considerations such as going green and sustainability initiatives. Customer's needs can be met
directly through practical experiences or indirectly through word of mouth and marketing
channels. Step three is brand response in accordance of consumers' judgments about categories
like brand superiority, credibility, and quality. The model describes six positive feelings,
including fun, excitement, social approval, warmth, security, and self-respect (Duberg, 2021).
Step four is brand resonance, involves developing a deep relationship with customers. It is
considered the most difficult to attain yet most desirable as a strong connection should be
established through repeat purchases and active engagement and support.
Figure 9 - Brand Equity Pyramid Model (Hayes, 2021)
2.8. Brand Equity Measurement
Brand equity metrics measures the value of the brand, embodies a promise about quality,
performance, and other dimensions over the competitors. Bill Moran, an executive in marketing
field, has derived an index of brand equity, composed of three factors: Durability in customer

26
loyalty and retention, relative pricing ratio, and effective market share (Daye, 2016). According
to Aaker, information of certain proprietary brand assets is required to be collected from
consumers when measuring brand equity (Berry, 2000). Enhanced performance and efficiency in
marketing is the outcome of high brand equity. A study analyzed the mediating effects of
customer satisfaction in the hospitality industry using the structural equation modeling approach,
and shows that ideal self-congruence and physical quality significantly contributed to customer
satisfaction.
Companies could try to ask questions about the customer's purchase history and future intent to
repurchase as brand awareness is an emotional-based metric. NPS, or Net Promoter Score, is a
methodology that can drive loyalty by providing insights on emotional connection between the
brand and customers (Svensson, 2006). Conjoint analysis is a survey-based statistical technique
used to reveal decision making processes and measure the value of brand features (Toor, 2020).
Customer preference aspects can be measured through sales data, surveys and focus groups
(David, 2020). Financial metrics are directly tied to the performance of sales and related
indicators, which can be measured by average transaction value or rate of sustained growth
(Howell et al., 2005). Output metrics are based on marketing activity and the results produced,
can be measured through sales lift, ROI of distribution channels, market share, and the rate of
customer acquisition (Pica, 2019).
2.9. Conceptual Framework
Lethinen viewed service quality as a process with input and output on technical and functional
aspects (Agrawal, 2007). The definitions of service quality point out two major theories: first,
quality is dependent on perceptions and expectations; second, those are distinctive from
satisfaction which is more inclusive of situational and personal factors besides the quality
delivered (Arokiasamy, 2012).
Figure 10 & 11 - Average Expectation and Perception Score and SERVQUAL Index per
Dimension (Datta et al.2017)

27
Figure 12 - Conceptual Framework of Research (Agrawal, 2007)

28
Chapter 3
RESEARCH METHODOLOGY

29
3.1. Research Introduction
This chapter will discuss and outline the methods, approaches, and tools that are going to be
undertaken for data collection, sampling, analysis, and justification. Accuracy and credibility are
two vital variables to validate the study (Slater, 2018). The purpose of this research is to clarify
the relationship between customer satisfaction and service quality through developing scientific
theories and ideas. Systematic investigation is the formal term to represent the cyclical process
of forming hypothesis, design appropriate methods, collect data and analyze findings.
Exploratory research is conducted around undefined issues, aiming to gain a clearer
understanding of the problem's nature without providing a conclusive answer. Instead, it enables
researchers to conduct further in-depth investigation later on. Descriptive research describes the
characteristics, focusing on 'how' and 'what', to expand the overall knowledge about the problem.
Explanatory research is casual which determines the interaction of variables, identifying causes
and effects based on practical experiments.
3.1.1. Research Onion
Peeling Saunder's Research Onion is designed to provide the methodological basis to conduct
the study research (Sahay et al., 2016).
Figure 13 - Research Onion (Melnikovas, 2018)
3.2. Research Philosophy
The study will engage critical realism research philosophy, a belief about how data about a case
should be gathered and analyzed. It focuses on statistical facts obtained which will then influence
respondents' interpretations (Johnson et al., 2010). Additionally, it separates entities from

30
perceptions meanwhile assuming that these realism approaches to possess an independent
existence from underlying principles (Phillips, 1987). Epistemology means what is known to be
true while doxology means what is believed to be true (Ragab et al., 2017). There is a slight
difference between the two terms where epistemology encompasses various philosophies
(Zukauskas et al., 2017).
3.2.1. Positivism and Interpretivism
The common juxtaposition of quantitative and qualitative research approach usually fades out the
fact that qualitative itself encompasses two traditions known as positivism and interpretivism.
Positivist identify qualitative data with propositions for examination in other circumstances whilst
interpretivist combine data whose manifestations are associated with a specific case. This
dissertation will highlight the key features and fundamental differences between two propositions
and offer suggestion for a combination of both into actual sociological research (Lin, 2005).
Meta-theoretical
Assumptions
Positivism
Interpretivism
Ontology
Researcher and reality are
separate
Researcher and reality are
inseparable
Epistemology
Objective reality exists
beyond human mind
Knowledge is intentionally
constituted through
experience
Research Object
Research object has inherent
qualities that exist
independently of the
researcher
Research object is interpreted
in light of meaning structure
of researcher's experience
Method
Statistics and content analysis
Hermeneutics,
phenomenology, etc.
Theory of Truth
Correspondence theory of
truth: One-to-one mapping
between research statements
and reality
Truth as intentional
fulfillment: Interpretations of
research object match
experience of object
Validity
Certainty, data truly measures
reality
Defensible knowledge claims
Reliability
Replicability, research results
can be reproduced
Interpretive awareness,
researchers recognize and
address implications of their
subjectivity
Figure 14 - Positivism and Interpretivism (Sandberg, N.D.)
Positivism is a philosophical theory claiming that knowledge is based on the properties of
phenomena and their relations. Hypotheses generated and examined using quantitative analysis

31
and statistical methods, through direct observation and empirical research. Positivists prefer using
structured questionnaires and social surveys to have high levels of reliability and
representativeness. They stress the importance of comparative methods on a large scale to
uncover social patterns and hidden correlations within society. It is the belief that social science
can be as rigorously scientific as natural sciences. Positivists argue for objectivity, value-free,
generalizable data, while criticizing that interpretivists could not see beyond personal experiences
and biases. Hence, verified data derived from sensory experience, or empirical evidences, are
interpreted with logical reasoning.
Interpretivism, on the other hand, holds that human knowledge is socially constructed, not
objective, but transmitted through personal discourses, life experiences, and ideas. They are
sometimes referred to negativists or anti-positivists, whom declare that social realm can't be
studied with natural scientific investigation, but require a different epistemology. Interpretivists
support the qualitative approach through conducting unstructured interviews or participant
observations. From that philosophic perspective, interpretivism are aware of the concepts and
language of the research that might shape the perceptions of society (Soleymani, 2017).
According to them, people do not always react to external factors but are intricate and complex,
having their own reasons for actions thus scientific conclusions are not accurate nor appropriate.
This viewpoint states that it is not possible to form valid causal predictions about the social world
(Alharasheh, 2019).
3.2.2. Inductive and Deductive Research Approach
This paper will explain systematically how qualitative data can be analyzed using inductive and
deductive approaches. These approaches in data analysis are critical as they offer theoretical
orientation to practice. It is not uncommon to combine these two into a large study (Streefkerk,
2019). In short, the key difference between deductive and inductive reasoning is that one aims at
testing existing theory while the other aims at developing a theory respectively. Deductive
reasoning moves from broad generalizations to specific observations and inductive reasoning vice
versa (Azungah, 2018).
Inductive research approach is used when there is little to no existing theory to a test nor literature
on a topic. The three stages are observation, pattern recognition, and theory development. For
instance: elephants depend on water to survive, mammals depend on water to live, therefore all
biological creature depend on water to exist. General conclusions and grounded theories are
drawn from what is seen, allowing flexibility, closer to context. Nevertheless, findings on the
basis of inductive research cannot be proven, and so may be invalidated.
Figure 15 - Inductive Stages (Gabriel, 2013)

32
Deductive research approach draws conclusions from initial premises, major and minor,
following the syllogism logic of expressed in classical literature. In other words, it formulates
specific hypotheses on the foundation of practical and theoretical knowledge before
experimented. For instance: Socrates is a man, all men are mortal, therefore Socrates is mortal.
The three stages are hypothesis formulation based on existing theory, data collection, and result
analysis. It is important to note that deductive research always start with a theory, or a result of
inductive research. As is it strongly associated to logical positivism, deduction approach in social
research is considered more appealing (Conger, et al., 2007). A limitation is that conclusions of
this type can only be accepted if all terms and premises are clear and true.
Figure 16 - Deductive Stages (Gabriel, 2013)
3.2.3. Quantitative and Qualitative Research Methods
Qualitative research method is a case study that induces hypotheses from data, associated with
terms like complexity, subjectivity and context; while quantitative research method is a
generalization that begins with hypotheses, associated with terms like objectivity and
replicability.
Quantitative Research
Qualitative Research
Focuses on testing hypotheses and theories
Focuses on exploring ideas and formulating
theory
Analyzed through statistics and mathematics
Analyzed through summarization and
interpretation
Expressed in numbers, graphs, tables
Expressed in words
Concerned with behavior
Concerned with meaning
Closed or multiple choice questions
Open-ended questions
Figure 17 - Qualitative vs Quantitative (Streefkerk, 2019)
On the one hand, qualitative research is creative and interpretive as various techniques can be
applied to thematic analysis, discourse analysis, and content analysis (Glaser et al., 1967). It is a
method that enables data collection freely through interviews, direct observations, focus groups,
to the analysis of artifacts, cultural records and documents (Braun et al., 2006). Furthermore,
other types of qualitative research include diary accounts, ethnography, forums, visual materials,
or personal experience (Denzin et al., 1994). Results from qualitative methods express how
people perceive realities and how they react in consequence. Because of this, it is often applied

33
in areas of psychology, philosophy, and social science, primarily used to gain an in-depth
understanding of thoughts, opinions, and dig deeper into the issue (Farnsworth, 2019).
On the other hand, quantitative research allows numerical data to be collected and uncovered
across a larger population. Statistics can be descriptive or inferential, and variables are predicted,
and controlled throughout the process. Quantitative method aims to establish general laws,
ultimately relies on the context. It is mostly used in physical and natural environments like
biology, chemistry, physics, engineering, finance, computer science, and medical (McLeod,
2019).
Qualitative
Quantitative
Conceptual
Concerned with human
behavior, understanding and
perspective.
Assumes a negotiated
dynamic reality.
Concerned with discovering
facts about phenomena.
Assumes measureable and
fixed reality.
Methodological
Data collected through
observation, analyzed and
reported.
Data collected through
measurement, analyzed,
compared, and reported.
Figure 18 - Qualitative vs. Quantitative (Minchiello et al., 1990)
3.3. Research Paradigm
Research paradigm is a model that considers the research standard based on verified practice,
allowing the structure to become the base for investigation (Kuhn, 2012). This study analyzes on
the contrasting views among service quality, customer loyalty, satisfaction, and brand equity
within the epistemological pattern. Deductive approach was employed in this study as hypotheses
were tested against empirical framework, and in the light of existing theoretical developments.
3.3.1. Research Strategy
This study will propose a survey to conduct the research because it offers flexibility to investigate
precise areas of interest and allows direct questions about customers' perceptions and subjective
attitudes. The study will be using qualitative research methods to review literature articles and
collect data (Tjora, 2018). Surveys are commonly used in academic, private, and government
sectors as it is less time consuming but offers large quantity of information. Additionally, the ease
to efficiently compare findings and make inductive evaluations for discussion is what makes this
methodology beneficial. Questionnaires will be distributed to various respondents at random
settings. It will focus on the five SERVQUAL dimensions, with a rating scale with 1 being
strongly disagree and 5 strongly agree. In order to assess the effectiveness, primary data are used
as resource and the study will examine on how the independent variable, which is service quality,
affect customer satisfaction, the dependent variable.

34
Figure 18 - Process of Deduction Research (Bryman et al., 2008)
3.3.2. Research Choices
This research exerts the mono method of qualitative approach and implies a single technique to
collect secondary source of data. Considering lack of access to high population and time
restriction, qualitative research approach is more appropriate for an in-depth investigation on
consumers' personalities, needs, and expectations.
3.3.3. Time Horizon
Since the research is restrained to a specific time frame, data can only be gathered relatively on a
short time period. Thus, this study will apply a cross-sectional time horizon. The aim of this study
is to present testable results that compromise and evaluated through attitudinal measures. Overall,
the study will seek to provide a snapshot of customers' attitudes towards quality of service in
organizations, and elucidate the effect of service quality upon customer satisfaction.
3.3.4. Data Collection
According to Rutkowski, secondary data is easy and cost-efficient however many argues that
primary data is a better fit for research at hand because it is customized to the specific aim of the
Theory
Hypothesis
Data Collection
Findings
Hypotheses confirmed or rejected
Revision of theory

35
study (Creswell, 2003). This dissertation utilizes both primary and secondary data collection
methods to create a broad picture of the problem. However, the major source will be secondary
data, for the sake of strengthening the research insights. To conduct the survey, we will first get
permission from the respondents and their commitment to answer truthfully. Questions are open-
ended and incognito; thus the interviewees could share their thoughts freely without biases.
Questionnaires will provide relevant and detailed information on certain aspects. Besides, with
the support of secondary data such as scientific journals, archival case studies and online sources,
it will maximize the effectiveness of the research.
3.3.5. Research Instrument
For primary data collection, survey and questionnaire will be used, consisting of roughly 30
closed and open-ended questions, a few multiple choice and Likert scale related to the topic of
satisfaction, loyalty, brand equity, service delivery. Respondents have the choice to answer as
much as they want and give any additional notes if necessary. In case primary data is unable due
to insufficient raw materials, secondary research may become the main source of this study to
reduce cost and simplify accessibility (Ruggiano, 2019). Secondary data may be retrieved and
accumulated from publications and previous studies. With that, it will aid in idea structuring and
develop new concepts and directions for the research. The one disadvantage with secondary data
is the difficulty to analyze, as there are no clear guidelines of report (Bashir et al., 2008).
Condensation of data is a critical step to handle information but should avoid making typical
conclusions nor reject anomalies and exceptions.
3.4. Research Design
Research design provides a blueprint of methodologies in order to perform analysis and achieve
outcomes. The study uses exploratory research approach, outlining the study aspects and facts
that are already available. Several systems to measure direct customer satisfaction provide
analysis of particular issues from different perspectives that fit operations and structure. After
identify the attributes, it is important to design a good sampling plan before conducting the
research (Mattson, 2009). However, regardless of how well the plan is designed or how effective
the research carried out, the findings could be misleading if the problem is not correctly identified,
meaning there are still uncertainties about the hypotheses. It is possible to first conduct a pre-test
study or pilot study to verify the understanding of respondents and edit the draft if needed.
Sampling provide a range of methods to reduce data needed for study by only considering data
from a specific subset rather than the general population as a whole (Saunders et al., 2012). Two
techniques are probability and non-probability, with the chances of selection known and
unknown, respectively. This study will use the non-probability technique as respondents will be
selected at random, convenient of accessibility. Sampling is one of the most useful factor which
will determine research accuracy and the final results (Singh, 2018).

36
Figure 19 - Research Design (Quan et al., N.D.)
3.5. Validity and Reliability Analysis
The strength of qualitative research is validity, and many sources of information will give more
objective and fair outcomes. It is concerned about whether the findings truly answer the research
questions. To measure validity, information was gathered from authentic sources prior to the
research. Validity of this study appears to be high, as key words and specified articles were
thoroughly examined. Reliability is the degree to which research measures are free from fallacies,
referring to the consistency and stability of the techniques (George et al., 2003). It concerns
transparency of raw data and whether similar observations will be reached by other researchers.
3.6. Research Ethics
In order to commence this research, approval was obtained by the institution's lecturer and the
University of Northampton (see Declaration form - Appendix 1). Relevant ethical form is signed
and attached in the dissertation paper (see Ethics form - Appendix 2). Next, all information from
online resources, journals, and books used in the thesis are referenced with the authors' names
and dates. Although the research mostly consists of secondary data, any primary data from
respondents will be treated with confidentiality by their consent.

37
3.7. Data Analysis Procedure
After defining the questions, measurement priorities should be clearly set, regarding unit of
measure, time frame, and other factors. During the analysis steps, advanced tools and software
can be extremely useful to efficiently review and interpret information (Dillard, 2017). Last but
not least, before reporting the findings, it is critical to assess the collected data to be reliable and
valid and fully understand the procedures. The analysis breaks down data to clarify the
relationship between component parts and its nature (Saunders et al., 2012). This study uses both
descriptive and inferential statistics to analyze data, in form of literature review, tables, and
graphs to present the results.
Figure 20 - Data Classification (Agbor, 2011)

38
Chapter 4
ANALYSIS AND RESULTS

39
4.1. Demographics and Cross Tabulations
This section will discuss the relationship between variables through descriptive analysis.
Although direct interviews cannot be conducted, the research gathered statistical data by
reviewing previous articles and similar case studies. First, within the tangibles dimension, the
findings showed a relationship between customer satisfaction and the perception of equipment
and materials being up-to-date. In addition, customers tend to be more satisfied when physical
facilities are new and pleasant-looking. According to research, ignoring the requests or not willing
to help confused customers is a strong drawback. Customers are more convinced about the
assurance dimension of the service if they have good impressions and receive support from
employees. By not showing enough attention, service providers accidentally expose lack of
knowledge on consumers' needs.
Figure 21 - Regression Analysis Between Service Quality Variables and Customer Satisfaction
(Fida et al., 2020)

40
Figure 22 - Correlation Analysis Between Service Quality, Customer Satisfaction and Loyalty
(Fida et al., 2020)
4.2. Hypothesis Testing
Four null and alternative hypotheses have been identified and investigated throughout the
research, stated earlier in chapter 1. Supported with evidence, the final results determined positive
relations of service quality against all variables including customer satisfaction, customer loyalty,
and brand equity. However, hypothesis 4 (Ho4) cannot be confirmed entirely nor rejected due to
the variance in expectations and perceptions of each individual customer.
H1: There is significant relationship between service quality and customer satisfaction.
H1: There is significant relationship between service quality and customer loyalty.
H1: There is significant relationship between service quality and brand equity.
Ho4: There could be significant relationship between perceived service quality and delivery
outcome.
4.3. Findings and Discussions
Empirical findings from the research were collected, analyzed, and arranged logically; those not
relevant to research aims and objectives were removed. This section summarizes and arrange the
findings into subsections. Firstly, over half respondents and customers said they are generally
happy with the services most of the time, especially those within their daily routine like the
supermarket, and do not mind too much about top notch quality. They are more likely to expect
high quality service in banks, hotels, and hospitals. Fast and simple process, positive attitude, and
polite communication will lead to satisfaction. Interestingly, restaurants that treat guests well
received a 48% higher return rate. Nevertheless, certain elements can break the barrier such as
errors in operations, faulty equipment, or lack of knowledge by the service providers.

41
Price is another important factor in determining customer satisfaction. Organizations must not
charge high price for an average quality service. Findings showed that the majority of customers
are very price sensitive and evaluate the service based on their expenditure. Huge number of
researches highlighted that male customers are easier to please, as opposed to female. Service
providers should pay closer attention to the demands of female customers as gender difference in
marketing should not be neglected. Several empirical evidences abound to support the view that
gender makes a different in the buying process. If possible, companies should offer differentiated
service channels, such as a hair salon, to effectively tackle this issue. Employees should seek to
assess and treat customers exclusively, similar to high-end stores, and communicate frequently.
The study indicates that customer satisfaction and loyalty are lead indicators of organizational
performance in the long-term. Organizations which failed to improve their service quality loose
a substantial amount of existing customers. Customers are likely to stay loyal with companies
that provide services at affordable price yet high value. Nevertheless, just like how satisfied
customers does not equal loyal ones, loyalty itself does not guarantee there will be word of mouth
references. As a result, service should have a unique selling point that exceeds customer
expectations, which there will be stronger incentives to recommend others. Surveys are one of
the most effective way to generate ideas for quality improvement, but should not be based on
flawed methods.
Figure 23 - Estimated Model (Rita et al., 2019)

42
Chapter 5
CONCLUSION

43
5.1. Recommendations, Implications, and Future Research
Figure 24 - Service Quality Satisfaction Level (Ndubsisi, 2005)
Organizations are recommended to view the studies when needing to improve service quality and
marketing strategies. Customer's attitudes drive satisfaction and behavior, which will gradually
develop into loyalty. Companies should be aware of environmental differences in ideology and
cultural value, thereby providing customized services instead of standard (Abdel, 2015). Another
recommendation is to schedule the workload rather to traditional schedules, meaning to be
responsive and flexible when there are high demands. Majority of customers shared that
prolonged waiting periods and disordered personnel are the common irritations. Results from the
study had led to a revised theoretical framework. In order to get a holistic view of the case, it is
prudent to perform further research, focusing on aspects that have not yet been discovered due to
limitations. Besides from inadequacy of information and other shortcomings, the thesis is still
systematic and comprehensive.
5.2 Conclusion
Through the summarization of the findings, hypotheses results, the relationship between variables
are proven clear, and that brand equity has a significant impact on customer perceptions. With
the aim of analyzing service quality, the research implemented cross-sectional time horizon, using
deduction and qualitative approach. A theoretical model has been developed to measure and
discuss the concepts. In conclusion, the dissertation has given evidence as to how service quality
affects customer satisfaction and loyalty.

44
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Akter, S. et al., (2010). Service Quality of Health Platforms: Development and Validation of a Hierarchical
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49
APPENDIX 1 - DECLARATION FORM
Faculty Business & Law
Department of Strategy, Marketing and Economics
Declaration of Original Authorship
Name:
VU NGUYEN KHANH DUY
Course:
BACHELOR OF ARTS (HONORS) BUSINESS STUDIES YEAR 3 SEP INTAKE
In submitting this dissertation, I confirm that:
(i) The material contained within this dissertation is all my own work. Where the work of others has been drawn
upon (for example books; articles; unpublished papers including the work of staff and students; non-book
materials such as videos and audio recordings; electronic publications on disk, CD-ROM on the internet), it has
been acknowledged and properly referenced using Harvard notation.
(ii) The work has not already been accepted in substance for any other degree and is not being concurrently
submitted in substance for any degree other than the one on which i am currently registered.
(iii) My original (primary) data has been seen by, and discussed with, my dissertation supervisor.
(iv) I have downloaded an electronic version of this dissertation to Turn-it-in having made allowance for any
confidentiality issues.
(v) If I consider any part of this work to be CONFIDENTIAL - I have detailed on the next page which parts are
confidential.
Signed:
VU NGUYEN KHANH DUY
Date:
24/03/2021
Dissertation Title: SERVICE QUALITY AND ITS IMPACT ON CUSTOMER SATISFACTION

50
APPENDIX 2 - ETHICAL FORM
THE UNIVERSITY OF NORTHAMPTON
Faculty Business & Law
STUDENT PROJECT / DISSERTATION ETHICAL REVIEW
SECTION A:
Project Title:
Service Quality and its impact on Customer Satisfaction
Student:
Vu Nguyen Khanh Duy
Student number:
19406544
Course:
Bachelors of Arts (Honors) Business Studies Year 3 Sep Intake
Supervisor:
Ms. Marta
Project start date:
March 1 2021
SECTION B: PROJECT OUTLINE
Issue
Please provide sufficient detail for your supervisor to assess strategies used to
address ethical issues in the research proposal
Aim / objectives of the
study
These need to be clearly
stated and in accord with
the title of the study.
(Sensitive subject areas
which might involve
distress to the participants
will be referred to the
Course Approval Panel).
• To investigate the various factors that affect customer loyalty and
satisfaction
• To investigate the various factors that affect service quality and brand
equity
• To identify issues within service quality and measure its impact
• To give recommendations and strategies to improve service quality
Brief overview of
research methodology
The methodology only
needs to be explained in
sufficient detail to show
the approach used (e.g.
survey) and explain the
research methods to be
used during the study.
• Gathering data and statistics from secondary sources: articles, journals,
case studies
• Information are critically analyzed and summarized
• Primary survey cannot be conducted due to lack of resources
• Deductive and qualitative approach implemented
• Necessary diagrams, tables, charts, graphs, are included
Does your study require
any premission for
study?
If so, please give details.
Not Applicable
Participants
Please outline who will
participate in your
research. If your research
involves vulnerable
groups (e.g. children,
adults with learning
Not Applicable

51
disabilities), it must be
reffered to the Course
Assessment Panel.
Access to Participants
Please give details about
how participants will be
identified and contacted.
Not Applicable
How will your data be
recorded and stored?
Not Applicable
Confidentiality
Please outline the level of
confidentiality you will
offer respondents and how
this will be respected. You
should also outline about
who will have access to
the data and how it will be
stored. (This should be
included on information
sheet.)
Not Applicable
Anonymity
Do you intend to offer
anonymity? If so, please
indicate how this will be
achieved.
Not Applicable
Could the research
induce psychological
stress or anxiety, cause
harm or negative
consequences for the
participants (beyond the
risks encountered in
normal life)?
If yes, you should outline
what support there will be
for participants.
Not Applicable
SECTION C - SUMMARY OF ETHICAL ISSUES
Please give a summary of the ethical issues and any action that will be taken to address the issue(s).
In order to commence this research, approval from the module supervisor and institution (University of
Northampton) will be obtained. Any favouritism and objectivity will be avoided.

52
SECTION D - ADDITIONAL DOCUMENTS CHECKLIST
Please supply to your supervisors copies of all relevant supporting documentation electronically. If this is
not available electronically, please provide explanation and supply hard copy.
I have included the following documents:
Information sheet Not applicable
Consent form Not applicable
Letters Not applicable
Questionnaire Not applicable
Interview schedule Not applicable
SECTION E - STATEMENT BY STUDENT
I confirm that the information I have given in this form on ethical issues is correct.
Signature VU NGUYEN KHANH DUY Date: 24/03/2021
Affirmation by Supervisor
I have read the Ethical Review Checklist, and I can confirm that, to the best of my understanding, the
information presented by the student is correct and appropriate to allow an informed judgement on whether
further ethical approval is required.
Signature Date:
SECTION F - SUPERVISOR RECOMMENDATION ON THE PROJECT'S ETHICAL STATUS
Having satisfied myself of the accuracy of the project's ethical statement, I believe that the appropriate action is:
The project proceeds in its present form
The project proposal needs further assessment under the appropriate Course
Approval Panel
The project needs to be returned to the student for modification prior to
further action